The impending closure of the Avondale Shipyard is expected to take its toll on the New Orleans economy during 2013, but the region is expected to rebound in 2014 thanks to more than $10 billion in public works and industrial construction projects.
That’s according to the “Louisiana Economic Outlook: 2013 and 2014” prepared by Loren Scott, a retired LSU economics professor, and Jim Richardson, the John Rhea Alumni Professor of Economics at LSU.
The forecast, released Wednesday, projects New Orleans will lose 1,400 jobs in 2013, when Avondale closes.
“It is difficult to overcome the loss of 3,700 jobs,” Scott said during a presentation Wednesday in Baton Rouge.
But the impressive backlog of projects will help create 4,000 jobs in 2014.
Louisiana is expected to add 22,700 jobs in 2013, which will bring the number of people working to 1,945,700, an employment record for the state. An additional 27,500 jobs are set to be added in 2014.
The state of Louisiana is projected to see a 2.6 percent increase in the number of jobs from 2012 to 2014.
Among the state’s metro areas, Lafayette is projected to be the biggest gainer, seeing a 6.9 percent increase in the number of jobs over the two-year period. It is followed by Houma, a 6.2 percent gain; Lake Charles, 5.7 percent; Alexandria, 2.7 percent; Baton Rouge, 2.4 percent; Monroe and Shreveport, each 0.8 percent; and New Orleans, 0.6 percent. Rural parishes will have a 3.1 percent increase.
Scott said if one or two of the proposed major projects that are being considered come through, the number of jobs in Louisiana could top 2 million by 2014. Scott noted the state has come near the 2 million jobs mark several times, but never hit the mark because of events such as the 9/11 terrorist attacks, hurricanes Katrina and Rita, and the Great Recession.
“Louisiana is doing way better than the national economy,” Scott said.
The state actually has seen the number of jobs increase since 2008.
The projects that will help the New Orleans economy rebound in 2014 include the new $1.06 billion Charity Hospital, a $995 million Veterans Affairs facility and a potential $1 billion expansion of the Marathon Refinery in Garyville.
New Orleans is also a finalist for five large projects, with code names such as Acme, Hot Brick and Yale. Combined, those projects would represent a $1.8 billion investment in the region and would create 2,350 jobs.
While the study said it is doubtful the city would pull a clean sweep of the projects, just one or two would be a real coup that would further improve the future economic forecast.
New Orleans, along with Houma, also is expected to benefit from additional fines and payments BP will make as part of settlements for the Deepwater Horizon disaster.
LAFAYETTE: Over the next two years, metro Lafayette is projected to be the fastest-growing area in the state, with an estimated 5,800 jobs set to be created in 2013 and 5,600 jobs in 2014.
The increased economic activity in Acadiana is being driven by two factors:
The report notes the Lafayette figures are based on U.S. Bureau of Labor Statistics estimates, which Scott has said seem unnaturally high.
For the first seven months of 2012, the Acadiana area is estimated to have added 14,000 jobs, a rate that outstrips the growth seen in the oil boom years, such as 1981, when 12,000 jobs were created.
Scott has repeatedly questioned the accuracy of the BLS figures, saying the figures are based on too small a sample.
BATON ROUGE: Baton Rouge is projected to add 5,000 jobs in 2013 and 4,000 in 2014, thanks to growth in the petrochemical industry. There is at least $4.1 billion in ongoing or announced petrochemical construction projects in metro Baton Rouge. Those include $700 million in expansions at Dow Chemical plants in Plaquemine and in St. Charles parishes, the $500 million project by Methanex Corp. to relocate an idle methanol plant to Geismar and a $466 million chlor-alkali plant Westlake Chemicals is building in Geismar.
The petrochemical growth is caused by the ample supply of cheap natural gas south Louisiana chemical plants can tap into. That has lowered the cost of one of the industry’s primary feedstocks and fuel sources.
Like New Orleans, the report said Baton Rouge is in the running for some more major projects. The Ascension Economic Development Corp. said three potential projects are being considered, with a value of $12.1 billion and up to 1,000 jobs. The Baton Rouge Area Chamber said “five highly likely” projects could be announced before year’s end that would create 358 jobs and lead to $910 million in spending.
The report projects Baton Rouge will set a record for jobs sometime in 2013, breaking figures set in 2008. This comes despite the potential for more layoffs in state government.
SHREVEPORT-BOSSIER: The Shreveport-Bossier region is expected to add 600 jobs in 2013 and 1,000 jobs in 2014. The market will deal with a decline brought on by the recent shutdown of the GM plant and reduced natural gas drilling activity in the Haynesville Shale. The region will be boosted by new businesses in the Caddo-Bossier Port, such as Ronpak, and the potential for another major new tenant at the facility.
HOUMA: Houma is projected to add 2,800 jobs in 2013 and 3,200 in 2014 as the region sees more drilling activity coming to the Gulf of Mexico and the potential for further BP claim settlements and additional hiring at shipyards.
LAKE CHARLES: Lake Charles also will see significant job gains, due to the chemical boom and industrial construction activity, such as the massive $5.6 billion liquefied natural gas export terminal planned by Cheniere Energy. The forecast calls for 2,300 new jobs in 2013 and 2,800 jobs in 2014.
MONROE: Monroe, which snapped an eight-year streak of net job losses in 2011, is projected to add 300 jobs in 2013 and 300 jobs in 2014. The continued growth of companies such as CenturyLink, Chase Mortgage and Graphic Packaging will lead to the new positions.
ALEXANDRIA: Alexandria is projected to add 1,100 new jobs in 2013 and 600 in 2014, thanks to the Sutherland Global business process outsourcing center, the biofuels plant that Sundrop Fuels will open and the casino the Jena Band of Choctaws is building.
RURAL: The rural parishes of Louisiana are projected to add 5,700 jobs in 2013 and 6,100 in 2014, as the primarily agricultural area shifts to allow projects like Nucor’s iron production plant in St. James Parish, the Petroplex oil storage facility in St. James and the Jeld-Wen wood fiber door facings plant in Winn Parish.
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